The
cofounder of MIT's Media Lab, Nicholas Negroponte, wants to make $100
laptops available to poor children throughout the world. The next few
months will be critical in determining whether the One Laptop per Child
project succeeds.

By James Surowiecki

In the decades after
the Civil War, libraries were scarce in much of the United States. Many
towns had no library at all, and those libraries that did exist were
typically small and private, run by clubs or lodges that had scraped
together collections of books to lend to their members or, on occasion,
to outsiders who paid a fee for borrowing privileges. For the most
part, towns did not have library buildings; book collections were
housed instead in cheap offices or in unused space in public buildings.
Even in bigger cities, it was often difficult to borrow books. Until
the very end of the 19th century, Pittsburgh, for instance, had just
one private lending library, and it struggled to stay afloat. And few
people, if any, took seriously the idea that every town in the country
should have a public library where citizens would have free and equal
access to books.

Andrew Carnegie changed all that.
Carnegie was an embodiment of the American Dream; born poor in
Scotland, he had emigrated to the United States and built a fortune in
the steel industry, turning himself into one of the country's
wealthiest and most powerful businessmen. As Carnegie told it, when he
was a young boy, he'd had to work instead of going to school. But a
wealthy local man named Colonel Anderson had put together a small
library of about 400 books, and every Saturday, Carnegie was allowed to
read and borrow some of them. The experience, Carnegie wrote later,
convinced him that there was no more productive way to help children
develop than to build public libraries. And so, beginning in the 1880s,
he set out to do just that, in towns all across the country.

Strictly
speaking, Carnegie began his campaign outside the United States; his
first library, built in 1881, was in his hometown of Dunfermline,
Scotland. The first library he built in the United States, eight years
later, opened in Â­Braddock, PA, where Carnegie Steel
had one of its biggest mills. A year later came the Carnegie Free
Library of Allegheny, PA. The Allegheny library was important because
it was the first funded according to the model that Carnegie would
follow thereafter: instead of simply paying for and endowing the
library, he offered the town a large initial grant on the condition
that it agree to pay for the library's operations thereafter. (In what
came to be known as the "Carnegie formula," towns generally committed
to an annual budget--for maintenance, new books, and so on--that
equaled 10 percent of Carnegie's original gift.) These were, in other
words, to be genuinely public libraries, dependent not on the largesse
of a single person but on communities' willingness to subsidize their
own access to knowledge.

That willingness was not
always easy to inspire; in some towns it was actually illegal at first
to use tax money to pay for libraries. But as more towns accepted
Carnegie's deal, and as it became evident that the libraries were
generally very popular once they were built, more towns decided that
they, too, needed free libraries. By the time he died in 1919, some 30
years after the Allegheny library opened, Carnegie had given away $350
million of his fortune; he spent more than $60 million of it to build
more than 2,800 libraries, including almost 2,000 in the United States
and almost 700 in Great Britain. His donations had so effectively
revolu­tionized public opinion that by the middle of
the 20th century, it was the rare American town that dared go without a
public library.

Carnegie is
usually talked about today as a precursor to people like Bill Gates and
Warren Buffett, multi-­billionaires who have
dedicated most of their wealth to philanthropic endeavors. But when you
look at the way Carnegie built libraries--seeding institutions around
the country and encouraging local involvement in the hope of convincing
people of the virtues of free access to knowledge--what it calls to
mind most is not Gates's prodigious effort to fund the fight against
infectious diseases but, rather, an endeavor called One Laptop per
Child (OLPC)--or, as it's colloquially known, the $100 laptop.

The
$100 laptop sprang from the fertile, utopian mind of tech guru Nicholas
Negroponte, who is the cofounder and chairman emeritus of the MIT Media
Lab, a successful venture capitalist, and the author of Being
Digital, the 1995 paean to the digital economy. The concept
behind the project, which Negroponte unveiled at the World Economic
Forum in Davos, Switzerland, less than two years ago, is as simple as
its name: give all children in the developing world laptop computers of
their own. If we achieved that, he believes, we could bridge what's
usually termed the "digital divide." The laptops would offer children
everywhere the opportunity to benefit from the Internet and would
enable them to work with and learn from each other in new ways. OLPC,
the nonprofit organization that Negroponte set up to manage the
project, has taken responsibility for designing the computer and
engaging an outside manufacturer to produce it. But the nonprofit is
not going to buy the computers. That, at least for now, is the
responsibility of governments, and Negroponte has said that the $100
laptop will not go into production until he has firm commitments from
governments to buy at least five million units. Would (or should) any
government be willing to lay out the cash? Negroponte answers that
question with characteristic bluntness. "Look at the math: even the
poorest country spends about $200 per year per child. We've estimated
what a connected, unlimited-Internet-access $100 laptop will cost to
own and run: $30 per year. That has got to be the very best investment
you can make. Period."

Despite the appeal of this
vision, Negroponte's project has attracted skepticism as well as
support. In part, that's because of Negroponte himself, whose
self-assured optimism makes him a permanent lightning rod. More than
that, though, OLPC is effectively trying to do two dramatic things at
the same time. It's trying to lower the cost of computing to the point
where it's accessible to the world's poor--which is to say, to most of
the world's population. And it's trying to succeed with a new model of
philanthropy, albeit one that harks back to Carnegie--blending private,
nonprofit, and governmental interests to create a project of vast scale
and scope on a budget that is, even by philanthropic standards,
surprisingly small.

Of course, this will only work
if OLPC can deliver on its promise, and the problem is that at this
moment you cannot buy anything resembling a computer, much less a
portable one, for a hundred dollars. OLPC had to design and build an
entirely new kind of laptop from scratch--one that would endure rough
handling, function even in the absence of a steady power supply, and
allow easy networking and Internet access, and whose readable if small
screen would use startlingly inexpensive technology. Not surprisingly,
critics doubted that it was possible. Yet in the past year, Negroponte
has lined up an impressive array of partners to furnish the innards of
the computer, including AMD and Red Hat, while Quanta, the Taiwanese
manufacturer that currently makes around a third of the world's
laptops, is on board to manufacture the machines.

OLPC
designers claim to have cracked the toughest problems they faced. When
the laptop is not plugged in, it can be powered by means of a foot
pedal (or pull string, depending on the final decision) that will
generate 10 minutes of power for every minute of exertion. Out of the
box, the laptops will connect with one another to form a mesh network
that will make each computer a transmission node, allowing the laptops
to talk to each other and greatly magnifying the range of any Internet
connection. And the screen will have both a high-resolution
black-and-white mode, in which it will be readable even in bright sun,
and a backlit, lower-resolution color mode. The designers say the
display will be at least as readable as today's LCD screens but use far
less power, and they expect it to cost about $35, which is roughly a
quarter of what a typical screen costs today. It will be a very small
screen for a laptop--seven and a half inches--but if it works, it will
represent a genuine engineering breakthrough.

Nevertheless,
the $100 laptop is not yet a reality. (In fact, the name is something
of a misnomer: for more than a year now, Negroponte has been predicting
an initial cost of closer to $150, though he expects that, as with most
electronic products, the laptop's price will fall as time goes on and
units are produced in greater volume.) OLPC has yet to demonstrate a
working version of the laptop; Negroponte says that the first working
models, so-called B machines, will come off the assembly line in
November, after which they'll be put through a torture course of
testing in five developing countries--Brazil, Argentina, Libya,
Thailand, and Nigeria--to see how they hold up. And even if they do
work, the task of persuading governments to buy them still remains.
Negroponte has made real progress on this front. In October, Libya
signed a memorandum of understanding that effectively commits it to
buying a million laptops, assuming the B machines pass their tests, and
the other four test nations seem nearly as likely to sign up if the
machines work as planned. But five million laptops is, by OLPC's
self-defined standards, just a start. No matter how well things go in
the next few months, Negroponte can almost certainly count on
continuing to spend a great deal of time negotiating with government
ministers around the globe. In that sense, just as we're waiting to see
whether OLPC's laptop will work, we're waiting to see whether its
"business" model will work, too. If it doesn't, the project will be
remembered as an interesting side note in the history of computing. If
it does, OLPC will become integral to one of the more remarkable
narratives of the past decade: the revolution in philanthropy.

Enterprising Philanthropy

As
the names of the Carnegie, Ford, and Rockefeller Foundations suggest,
American philanthropy has always depended heavily on American
businessmen. But with some exceptions--like the Carnegie libraries, or
the Salvation Army, which Peter Drucker once called "the most effective
organization in the United States"--the fact that foundations were
mostly funded by business did not mean they were businesslike in their
approach. Over the last decade or so, that has changed dramatically.
Beginning sometime in the mid-1990s, two trends came together to remake
philanthropy in the United States: the tremendous boom in the U.S.
economy and stock market, and a growing desire on the part of wealthy
businesspeople to apply their moneymaking techniques to other, less
commercial endeavors. The economic boom meant a lot more money floating
around: charitable donations in the United States rose 10 percent
annually in the late 1990s. It also meant a lot of newly wealthy
people, many of them entrepreneurs, who were interested in figuring out
how to spend that money in the smartest way possible. The result has
been an explosion in new forms of philanthropic investment and a
concentrated effort to identify what might be thought of as the
philanthropic equivalent of business opportunities: areas where neither
business nor government has been meeting a need. And although the
growth in charitable donations slowed with the stock-market crash and
recession, it's picked up again, with donations rising about 23 percent
between 2001 and 2005.

Some philanthropies are taking
on immense global problems. The Gates Foundation, most obviously, has
become one of the world's most forceful promoters of research on
malaria, tuberculosis, and AIDS, while Bill Clinton is currently
raising billions to improve AIDS treatment and research. Some are
taking on smaller, local problems. The Acumen Fund, for instance,
operates as a kind of philanthropic -­venture capital
fund, working with companies in the developing world on products and
services designed specifically to serve the four billion people who
live on less than $4 a day; its projects include drip-irrigation kits
in India and malaria nets in Africa. The Omidyar Network funds both
profit-seeking and nonprofit enterprises, while Google's various
philanthropic enterprises invest in everything from traditional
nonprofits to projects like OLPC to for-profit ventures.

What
all these organizations have in common is a much greater focus on the
return they get on their investments in charities, with "return"
defined more in terms of its social than its financial value. Often,
they explicitly demand that grant recipients meet performance goals
just as any corporate division would be expected to. The premise is
that it's possible to bring greater rationality not only to the
grant-making process but to the actual operations of philanthropic
organizations. This new model is sometimes called "high-engagement
philanthropy": just as venture capitalists often play an important role
in shaping the strategies of the companies they fund, these new
foundations tend to be more directly involved in their grantees'
operational decisions.

One Laptop
per Child is part of this broader movement: though it is receiving
grants rather than making them--Google and News Corp. are among its
donors--it is an excellent example of the application of business logic
to social problems. From one angle, in fact, OLPC looks more like a
company than like a traditional charity, in the sense that it is
designing and marketing a product and outsourcing its production to
firms that are expecting to make a profit. Instead of circumventing the
market, then, OLPC is working within it, and Negroponte is counting on
the efficiencies generated by market processes to drive the price of
the laptop down over time. At the same time, because OLPC is relying on
governments to buy its product, it needs to spend a great deal of time
lobbying and cajoling government officials, a task that is very
familiar to activist organizations.

OLPC is unusual
in relying on three different kinds of enterprises--private, nonprofit,
and governmental--to carry out its mission. On the one hand, this
structure arguably makes the project more robust, since OLPC can draw
on the different strengths of each. On the other hand, it also makes
things more complicated. Negroponte, for instance, says all his
advisors believed that OLPC would need to be a for-profit company in
order to attract the necessary talent. ("They were wrong," he says.)
More important, because OLPC is not simply a charity, it has a much
harder time making things happen than it would if it were giving money
away. Dealing with governments is not easy, particularly since OLPC has
initially chosen to try to do business primarily with big governments:
Argentina, Brazil, Nigeria, Thailand, and China. (Perhaps it's not a
coincidence that it was a small country, Libya, that was the first to
make a commitment to the project.) "Governments are hard; large
governments are harder; ministries of education are harder," Negroponte
says. "So we have indeed tackled the hardest of the hardest of the
hard." The course of OLPC's efforts in this sphere has not run entirely
smooth. In June, Sudeep Banerjee, India's education secretary, wrote a
letter to fellow members of his government saying that the country was
not interested in buying laptops for its students and that "we cannot
visualize a situation for decades" that would justify the program.
China, however, remains a possibility. Negroponte has met with the
Chinese minister of education twice.

For all the
challenges that OLPC's odd structure presents, though, it's hard to see
how such a novel project could succeed, at the scale Negroponte has in
mind, as either a charity or a for-profit company. "We'd like to move
five to seven million units in our first year," says Ethan Beard, a
Google employee who sits on the board of OLPC. "That's already a pretty
sizable amount of money. But eventually, we'd like to move 20 million
units a year, which is $2 billion or more, and there are very few, if
any, nonprofit institutions that could handle a project of that size."
And had OLPC been a for-profit company, persuading governments to buy
the $100 laptop would have been far more difficult. "If you're going to
be going in to government ministers and pitching them on education,
especially with a project this new and ambitious," Beard says, "you
need to be able to say, -€˜We're not doing
this to make money,' because otherwise your motives are always going to
be in question." Interestingly, there may be at least one important
exception to this rule. "China does not understand nonprofit
structures," Negroponte says, "and many people just cannot believe we
are doing this philanthropically."

The
Critics

From the start, there have
been objections to the $100 laptop. Many people simply assumed that the
project was hopeless, that there was no way to build a functioning
laptop at that price and no way to enlist partners with adequate
resources. "Let's see, build Xbox 3 for Microsoft or build PCs for
charity. Hmm, tough choice there," wrote Doug Mohney of the technology
website the Inquirer; Tony Roberts, the CEO of the U.K. charity
Computer Aid International, said the entire project was based on a
"misunderstanding of the history of technology." Others insisted, and
continue to insist, that even if a real machine is produced at the end
of all this, it will be little more than a toy. In December 2005, Craig
Barrett, the former CEO of Intel, dismissed the product as a "$100
gadget."

More substantively, and more recently,
critics have charged that as a means of bridging the digital divide,
the $100 laptop is simply the wrong technology. The success of the
laptop, the argument goes, depends on building an entirely new
infrastructure in the developing world, rather than relying on the
infrastructure that's already there. In OLPC's early stages, there
appeared to be a good chance that Microsoft would supply the laptop's
operating system. But around the time that deal fell
through--Negroponte decided to keep the software open source--Bill
Gates and Craig Mundie, Microsoft's chief research and strategy
officer, were proffering an alternative to Negroponte's plan, in the
form of an amped-up cellular phone for the developing world. Cell
phones--and cell towers--are ubiquitous in the Third World, and they're
already somewhat affordable, whereas Internet connectivity is much
harder to come by. Most of what can be done on an -­Internet--­connected laptop can
also be done on a cell phone, albeit more slowly and less comfortably.
Gates and Mundie argue, essentially, that we would be better off using
this existing infrastructure to put Net-enabled cellular phones in the
hands of kids and parents than trying to build something from scratch.
In July, Mundie unveiled a rough prototype of Microsoft's phone, called
FonePlus, and suggested that it would eventually allow users to read
e-mail, run applications like PocketOffice, and surf the Web. It's also
possible that the phone could be hooked up to a TV and a keyboard.

The
simplest and strongest argument against the $100 laptop, though, is
that even if it can be built, and even if it will work approximately as
well as Negroponte promises it will, it's still a waste of money. In an
ideal world with unlimited government budgets, the argument goes,
putting a laptop in the hands of every child would be a marvelous and
valuable feat. But in the far-from-ideal worlds of developing
countries, which generally have limited budgets and pervasive social
problems, millions or billions of dollars' worth of computers are a
luxury that governments can ill afford. Brazil, for instance, which
seems likely to buy a million laptops from OLPC as soon as they become
available, has around 45 million school-age children: equipping all of
them would cost something like $6.3 billion. Given the desperate
poverty of many Brazilians, are laptops the best use for that kind of
money?

The technology website
ZDNet U.K. put it this way: "If Bill Gates and $100 laptop progenitor
Nick -­Negroponte were to look at the places without
light and listen to those without a voice, a laptop per child would not
be first on the list." Philanthropists' efforts would be better
directed, in other words, to figuring out ways to help the truly needy.
The reality is that in most countries, towns don't even have libraries.
Are we really better off spending money on computers instead? When the
Indian education secretary wrote his letter in June declaring that
India would not be participating in the program, he made precisely this
point, arguing that there were more cost-effective ways to improve
student performance than buying laptops from OLPC. This objection
carries so much weight precisely because of OLPC's unusual structure.
If the organization were purely a charity, building and buying the
computers with its own money, we might question its priorities, but we
all know that charities spend billions of dollars every year on
less-than-urgent projects with which their donors are obsessed. And we
accept this, because we assume it's better that money get spent on some
philanthropic endeavor than on none. In the case of OLPC, though, tax
dollars are at stake.

Ultimately, the critiques of
OLPC can be divided into two types: those having with to do with
technology and those having to do with what one might describe as
ethics. Some of the technological objections can seem frivolous: a
machine with a readable 7.5-inch screen, three USB 2.0 ports,
power-saving features, 512 megabytes of flash memory, and a working
operating system is not a "gadget." Some will be answerable only a few
months from now, when we find out whether the laptop passes its field
tests. As for the argument that cellular phones will be a better route
to Internet access in most of the developing world for the foreseeable
future, their advantages have to be balanced against their
disadvantages: a minuscule screen and no keyboard. "Suggesting that
cell phones are an alternative is like saying we can use postage stamps
to read textbooks," Negroponte says. "Books have a purposeful size,
based on how the eye works and the ability to engage peripheral and
foveal vision at the same time for browsing. It is not by chance that
atlases are bigger than timetables." It is true that connecting the
phone to a keyboard and a television would yield what amounts to a
personal computer. But that would erode the cost advantage of cell
phones and, worse, tether students to particular spots (assuming, of
course, that they even have televisions).

And while
connecting laptops to the Internet is obviously fundamental to OLPC's
vision of how the project will change kids' lives, the mesh-networking
technology embedded in the laptops will be valuable even when Internet
connections aren't available. "To me, nowadays, a computer that's not
connected to the Net is useless," Beard says. "But allowing kids in a
school to network all of their computers together, even when they're
not on the Net, is actually important from an educational point of
view, because it allows them to collaborate and to learn from each
other in a way that they wouldn't have been able to before." In any
case, cell phones don't need to lose if OLPC wins, and vice versa: on
the contrary, it's clearly best for the developing world if lots of
companies and nonprofits are competing to supply them with new
technologies.

It may be difficult
for poorer governments to justify spending a good chunk of their
education budgets on laptops. But the -­reality of
both philanthropic and government spending is that money often goes to
projects that do not help as many people, or people who are as needy,
as other projects might. These projects may not be perfect, but they
can still do tremendous good. In the post-Reconstruction United States,
after all, there were lots of worthwhile things Carnegie could have
done with his money; in fact, in many of the towns where he built
libraries, citizens grumbled that their tax dollars should be going to
something that really mattered. Yet in the long run, one would be hard
pressed to say that either Carnegie or the taxpayers wasted that money,
because the social benefits of disseminating knowledge are so immense.

Similarly,
it may be a mistake to assume that technology is something only wealthy
nations can afford, and that poorer nations are better off
concentrating on basics like health and water. On the contrary, a
country can, as the prime minister of Ethiopia recently put it, be "too
poor not to invest in information and communications technology."
Information technology is often a useful way of improving connections
to the outside world, and thus creating greater possibilities of
exchange. And for children, access to new technology promises to speed
learning dramatically. "I have not met anybody who claims they are too
poor to invest in education, nor anybody that said it was a waste of
money," Negroponte says. "If somebody is dying of hunger, food comes
first. If somebody is dying from war, peace comes first. But if the
world is going to be a better place, the tools for doing so always
include education."

It may seem curious to buy
laptops where there are no libraries, but the promise is that computers
will bring the world's libraries inside a student's home. Despite the
element of wishfulness in this vision, the idea that the Net allows
countries to leapfrog traditional stages of development is almost
certainly correct. C. K. Prahalad, the University of Michigan professor
whose book The Fortune at the Bottom of the Pyramid
analyzes the tremendous market opportunities in the developing world,
argues forcefully that these countries are surprisingly fertile ground
for new technologies. "We assume that the poor will not accept
technology," he says. "The truth is, they will accept technology in
some ways even more easily than we will, because they have not been
socialized to anything else. They accept technology rapidly, as long as
that technology is useful. We have a very long forgetting curve. They
don't. They have only a learning curve."

It
is, in any case, important to recognize that the $100 laptop is not
currently being pitched to truly poor countries, although Negroponte
certainly envisions them as eventual customers. On the contrary, the
five nations currently on track to buy the laptops--Libya, Brazil,
Argentina, -­Nigeria, and (even after the coup that
removed Prime Minister -­Thaksin) Thailand--all have
relatively healthy economies and relatively large state budgets. That
makes it considerably easier for them to justify investing in a new
technology, particularly one that seems to offer the prospect of
mitigating one of the biggest problems they face: the sharp divide
between rich and poor. It also means that the $100 laptop could have a
bigger impact sooner than it might otherwise, since the students likely
to receive it first would use it to expand on skills they already
possess; students in very poor countries, by contrast, are more likely
to be illiterate and innumerate.

While those involved
with OLPC seem genuinely confident that the project will work, it could
still be derailed by any number of problems. The laptops could end up
being stolen from kids and resold, or the distribution of laptops could
simply create a new digital divide. (In Brazil, after all, one million
kids will suddenly have laptops, and 44 million won't.) More important,
relying on governments to buy a product guarantees that the process
will be capricious (especially in the case of undemocratic regimes),
and certainly Negroponte's failure to get India to commit to the
project was a blow to at least its short-term prospects. But even if we
don't know whether OLPC will succeed, we do know that if it does, it
will represent a dramatic step forward for both computing and
philanthropy.

What OLPC will have done, after all,
is figure out how to put computing power in the hands of millions more
people by using dramatically new technologies. Just as important, OLPC
will, should it succeed, serve as a new model for getting the
nonprofit, private, and public sectors to work together efficiently and
productively. In part because of frustration with government corruption
and bureaucracy, and in part because of the American preference for
private rather than public solutions to social problems, the idea of
working with governments in the developing world has become
increasingly less attractive to philanthropists. But there are problems
too big to be solved by NGOs or corporations (or governments, for that
matter)--problems that demand new kinds of alliances. OLPC is, in that
sense, not just building a new computing machine. It's also building a
new philanthropic machine, one as cobbled together and untraditional as
the $100 laptop. The question that remains is just how well either of
those machines will really work.

James
Surowiecki is the financial columnist at the New Yorker
and the author of The Wisdom of Crowds.